Co-operative Bank Ltd.

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This summary covers a non-shareholder loan from the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) of Japan to Co-operative Bank Ltd. (CB Bank) in Myanmar. The lender has applied for a MIGA guarantee of up to $14.3 million for a period of up to six years against the risks of transfer restriction, expropriation, and war and civil disturbance. The non-shareholder loan being provided by BTMU will finance the expansion of CB Bank in Myanmar. BTMU entered into strategic alliance with CB Bank in December 2012 and will provide the loan to increase lending to small and medium enterprises SMEs). The bank currently operates 76 branches and has plans to expand to 200 branches nationwide within the next three to five years. Environmental Categorization This project involves MIGA coverage of a non-shareholder to CB Bank to be used for onlending to SME clients. CB Bank's portfolio is largely short-term corporate loan and short-term exposure to SMEs mainly in trade and wholesale (over 70 percent). The environmental and social risks and impacts associated with the portfolio are considered few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. The project is a category FI-2 under MIGA's Policy on Environmental and Social Sustainability. CB Bank will be required to screen projects against MIGA's Exclusion List, national environmental and social laws and regulations, and MIGA's Performance Standards for corporate portfolio. The key environmental and social risk is the ability of CB Bank to identify and manage the environmental and social risks associated with its lending activities. At present, CB Bank has an Environmental and Social Policy, and an Environmental and Social Management System (ESMS) will be put in place in accordance with an agreed timeframe to ensure compliance with MIGA's requirements. CB Bank will assign an ESMS officer to the project and complete training in an agreed timeframe. CB Bank will also update its human resources policies and procedures to ensure full compliance with the requirements of MIGA's Performance Standards 2 on Labor and Working conditions. Development Impact The financial system in Myanmar is the least developed in Southeast Asia with lack of access to finance identified as the biggest challenge for the country's private sector. MIGA's proposed support will complement efforts by the International Finance Corporation and the World Bank to develop Myanmar's financial sector. MIGA's proposed support for the project is aligned with the Agency's strategy of promoting investments into countries eligible for concessional financing from the International Development Association and countries affected by conflict.

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